Press Release
From the Office of State Senator Eddie Lucio, Jr., District 27

For Immediate Release
May 10, 2001
Contact: Doris Sanchez
(512) 463-0127

Texas Senate Passes Landmark Reforms to the Texas Housing Agency

Austin, Texas--Yesterday, on May 9, 2001, the Texas Senate passed Senate Bill 322 by Senator Eddie Lucio, Jr. (D-Brownsville) establishing landmark reforms to the Texas Department of Housing and Community Affairs (TDHCA).

"The reforms established in SB 322 are the culmination of hours of work by the Sunset Commission and the members of the Legislature in order to restructure and strengthen the governing board of our Housing agency. With this bill, the Legislature set priorities for TDHCA to devote itself to serving the housing needs of our lower income citizens while establishing a fair, objective and open process for the awarding of housing contracts to developers," said Senator Lucio. SB 322 won the support of the non-for profit community and housing developers.

John Henneberger, co-director of the Texas Low Income Housing Information Service (a non-profit organization that works on behalf of housing for low income Texas families) stated, "Senator Lucio has been tenacious in his insistence that our state housing agency be reformed and focus on helping the most needy Texas families. With SB 322, Senator Lucio has hit a home run for the Border and lower income families all across the state of Texas."

Mr. Henneberger went on to say, "SB 322 is the most comprehensive reform of our state's housing programs ever passed by the Legislature. It combines both fiscal accountability and major new resources for the fight against homelessness, substandard living conditions and poverty."

Commenting on the overall reforms of the agency, Senator Lucio stated, "I am especially glad that we were able to increase citizen involvement and participation in the decision-making process within the agency, while restoring the accountability of TDHCA to the Legislature and the citizens of Texas."

SB 322 will now go to the House Committee on Urban Affairs where it is expected to pass in an expeditious manner. "I commend Chairman Bill G. Carter (R-Fort Worth) and Representative Pete Gallego (D-Alpine) for their work on this very important matter. Chairman Carter and Representative Gallego have been instrumental partners in reforming this troubled agency," Senator Lucio said.

"The work of key leaders in the Senate should also be recognized, such as the tireless work of Senator Chris Harris (R-Arlington) , Senator John J. Carona (R-Dallas) and Senator Frank Madla (D-San Antonio). Truly, this bill is a success due to our bipartisan leadership and vision," added Senator Lucio.

Jeanne Talerico, the Executive Director of the Texas Association of Local Housing Finance Agencies, stated that the new provisions in SB 322 will almost double the availability of first-time home buyer loans for low- and moderate-income working Texans. In addition, financing for affordable rental housing will be available in every region of the state rather than just the high income areas.

"We want to thank Senator Lucio for all the hard work he invested in making affordable housing a reality in Texas!" added Ms. Talerico.

Senator Lucio also stated, "Whether you are an elderly widow living in a cold, deteriorating home you cannot afford to heat; a person with a debilitating injury confined to a wheelchair who cannot find or afford a home; a family of farm workers in a colonia struggling to build a home with their own labor to realize the American dream; or a young working couple dreaming of a first home lying just beyond their grasp and limited paychecks, SB 322 provides a remedy and the necessary funding to help these most needy, yet deserving of Texans."

Mr. Henneberger concluded, "Senator Lucio's bill will make a difference in the lives of hundreds of thousands of Texas families for decades to come. It will put roofs over families' heads, help the elderly live in dignity and give the opportunity for freedom and independent living to persons with disabilities."

Highlights of the major Housing reforms established by Senate Bill 322, include, but are not limited to:

Increasing the first-time buyers bond volume cap by $219 million (from $250.5 million to $469.9 million) & the residential rental bond volume cap by $200 million (from $165.4 million to $365.1 million).

Improving and strengthening the TDHCA's programs that serve colonia residents.

Reforms the Colonia Self-Help Centers and provides that all of TDHCA's programs will be offered through the Centers.

Creates a $3 million statutory funding mechanism for the successful "Bootstrap" owner-builder self-help loan program, increases the maximum size of the loan from $25,000 to $30,000, and establishes the life of the program to 10 years.

Establishes & funds with $2 million a new colonia model subdivision program/revolving loan fund that will provide decent lots in quality subdivisions with all the necessary infrastructure.

Creating Colonia Advisory Committee to advise the board on the needs of colonia residents and requires TDHCA to develop an annual needs assessment and action plan to address those needs.

The advisory committee would consist of one colonia resident, one representative of a non-profit organization that serves colonia residents, one local government representative, one person to represent private interests in banking or land development, and one public member.

Requires TDHCA to collect information on demand for contract for deed conversion, self-help housing, consumer education, and other colonia resident services in counties within 100 miles of the Texas-Mexico Border. Requiring the Office of Colonia Initiatives to prepare a biennial action plan to list policy goals for its colonia programs and the expected outcomes.

Changing the Sunset date of TDHCA from 2001 to 2003 to provide for a two-year probationary period.

Establishes criteria to be used to decide whether TDHCA has successfully implemented the Sunset recommendations.

Restructuring the TDHCA governing board as a seven-member board composed of public members with demonstrated interests in housing and community support services issues.

The Governor would appoint a new Board by September 1, 2001, composed of public citizens with broader interests in housing and community support services.

Improving TDHCA's compliance process and requiring the board to consider an applicant's compliance history before approving any newly proposed projects.

TDHCA historically has not sufficiently considered underwriting and compliance recommendations in allocation decisions or compliance monitoring. The bill requires all projects to be reviewed for compliance before being sent to the Board for approval.

Requiring TDHCA to develop a strategic plan, customized by region, to provide affordable housing and to use the plan to allocate funds to meet regional priorities.

Requires TDHCA to ensure the most flexible funds are used to serve the lowest income residents when possible. Requires TDHCA to conduct a more thorough assessment of not only the need for housing and community support services in the state, but also the supply. Besides regional priorities, this recommendation would require TDHCA to establish objectives for each income category. Requires TDHCA to establish priorities to ensure that awards go to the applicants who are best able to meet the needs as established by TDHCA.

Requiring TDHCA to create a uniform application and funding cycle for housing programs that support projects that meet established need.

By creating a uniform application and fund allocation cycle, TDHCA could consider proposals together, and assess their ability to meet regional objectives. This single process would allow TDHCA the flexibility to apply its funding tools to each project to ensure its greatest success. All allocation decisions and applicant scoring would give the greatest weight to those projects that go the furthest in meeting the State's established housing and community service objectives.

Requiring TDHCA to obtain certifications of compliance with anti-discrimination laws by applicants for all housing-related programs.

Requires all housing-related program applicants to certify compliance with state and federal fair housing laws, including laws protecting people with disabilities from discrimination in obtaining housing. The agency could not fund projects that do not meet this requirement.

Requires the Board to establish procedures to monitor & enforce compliance with fair housing laws & requires TDHCA to identify reasonable Section 8 admittance policies for all tax credit properties.

Creating a separate governing board to manage the manufactured housing regulatory program, which remains administratively attached to TDHCA.

Transferring the Community Development Block Grant program from TDHCA and establishes it as the new Office of Rural Community Affairs.

Provides for the program to play a broader role in rural development with an independent governing board with expertise in rural issues and commitment to the future of rural Texas.

Requiring TDHCA to develop a single-family mortgage loan product to make loans to home buyers who would otherwise be forced to borrow from subprime lenders.

Requires the TDHCA to issue single-family mortgage revenue bonds based on a market feasibility study that studies the home mortgage credit needs in underserved economic & geographic submarkets.

Establishing a program to preserve "at risk" affordable housing developments.

Requires TDHCA to make low interest financing & grants available to private for-profit & non-profits seeking to preserve or rehabilitate affordable housing.

Requires TDHCA to establish an outreach and funding program for this purpose. Clarifies that any development receiving state funds cannot discriminate against individuals with Section 8 housing vouchers nor can they deny rent by using financial or minimum income standards.

Enhancing information available to the public about housing funding through TDHCA.

Enhances information required to be reported in the State Low Income Housing Plan. Requires TDHCA to publish the availability of housing funded for persons with disabilities on the Internet.

Establishing a regional planning process and regional development coordinators within TDHCA to encourage local housing providers to use innovative products and tools that best meet the housing needs in their region.

The coordinators will identify and work with regional partners to develop an analysis of the region's affordable housing needs based on data gathered with local and regional input.

Establishing a regional allocation method for multi-family housing. Gives TDHCA 25% of the multi-family allocation. Gives local issuers 75% of the allocation to be divided among the 11 state service regions. To encourage the development of affordable housing in ALL areas of the state.

Amends the formula used to determine the application amounts for single-family housing. Prevents an area from losing bond allocation when their population increases as a result of the new census figures.

Reforms the $300 million a year low-income housing tax credit program & establishes clear guidelines and disclosure requirements to govern the administration of the housing tax credit program.

Provides for: a legislatively defined purpose for the program; an annual allocation plan and application manual; an on-line application system; specific qualifying guidelines for a nonprofit set-aside allocation; mandatory disclosure of the identity by the applicant of interested persons; a process for evaluation and underwriting of applications; a process and timeline for the allocation of housing tax credits; a set-aside to preserve existing affordable housing developments; a formal appeals process; standards for providing public information and conducting public hearings; requirements for allowing and considering the views of elected officials prior to awarding tax credits in their districts; provisions for the enforceability of applicant representations' a system allowing the debarment from program participation; requirements that 5% of the apartments be assessable to people with disabilities; prohibition of discrimination against persons receiving federal housing assistance as required under federal law; coordination in the award of tax credits in rural areas with the appropriate rural development agency.

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